Energy is crucial for global economic growth. However, a rapidly growing population, increasing urbanization and industrial production are putting great pressure on existing energy supplies. There is a growing sense of urgency to find alternative sources of energy, on top of concerns about climate change, energy security, resource nationalism and high energy prices. We have identified five key energy trends.
1. The future is renewable
There’s no doubt that renewable energy sources like wind, solar, biomass, geothermal and tidal power are the fuels of the future. Nearly 80% of the world's energy needs could be met by renewable energy by 2050. This would play a key role in fighting global warming. Whether renewable energy development increases or is restrained will depend on public policies rather than on the availability of renewable energy sources. Industry, consumer and societal behavior coordinated globally, and investments in new energy technologies, will also be crucial.
2. The natural gas bridge
Until we can depend on renewable energy sources, natural gas – with its low CO2 emissions and plentiful supply - will most likely become a bridge to the future. Demand is increasing across Asia, Europe and the US. The supply of liquefied natural gas (LNG) is also rising due to massive projects in Australia and Russia’s Far East. Shale gas finds in the US have proven a viable fuel alternative and Europe’s shale gas reserves are said to be almost as big as those in the US. But before large-scale extractions take place in Europe, the issue of fracking (an extraction technology involving hydraulic fracturing) needs to be addressed.
3. Cleaner coal
Coal is shaking off its ‘dirty’ image as clean coal-based technologies like carbon capture and storage become a mainstream technology. China and India are still heavily dependent on coal for their electricity needs; 70% of China’s electricity comes from coal and it plans to add another 600 GW of coal-fired capacity in the next 20 years – the same amount that North America, Europe and Japan combined currently produce annually. To feed its demand, China is likely to continue to import coal from Russia, Mongolia, Australia and Indonesia.
4. Less dependence on oil
As renewable and semi-clean energy sources continue to grow, and as oil reserves dwindle, we will move away from our dependence on oil. However, in the short-term, high demand for transportation fuel from Asia, combined with an unstable supply of oil and few alternative energy solutions, will keep oil prices high and ensure that the offshore drilling boom continues. Demand for oil will be particularly strong in developing countries like China, which adds around 20 million vehicles to its roads each year.
5. Slower nuclear growth
The Fukushima disaster created strong anti-nuclear sentiment worldwide. However, completely cutting out nuclear energy – a crucial part of our global energy mix as a ‘cheap’ and ‘low-emission’ energy source –is not easy. Reducing nuclear energy without having an alternative solution will increase CO2 emissions and global energy prices. While Germany and Japan plan to halt their nuclear expansion plans, other countries are sticking to their ambitious nuclear energy strategies. Nuclear development will continue, but it will be subject to tighter safety regulations limiting its growth.